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Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) has entered into a definitive agreement to sell its Pelican Lake heavy oil operations, as well as other miscellaneous assets in northern Alberta, for gross cash proceeds of $975 million. The sale is expected to close on or before September 30, 2017, subject to normal closing conditions.

Proceeds from the sale will be applied against the $3.6 billion asset-sale bridge facility put in place to help fund Cenovus's acquisition of assets from ConocoPhillips earlier this year. With the close of this asset sale, the company intends to retire the first tranche of the bridge facility. The remaining two tranches mature in November 2018 and May 2019.

"This represents a significant first step in our strategy to optimize our asset portfolio and deleverage our balance sheet as planned following the acquisition of the ConocoPhillips assets," said Brian Ferguson, Cenovus President & Chief Executive Officer. "The divestiture processes for the remainder of our legacy conventional assets are proceeding as expected, with strong interest from potential buyers."

The sale process for the company's Suffield oil and natural gas assets is well advanced. The company also has data rooms open for its Palliser assets in southern Alberta as well as its Weyburn carbon-dioxide enhanced oil recovery operation in Saskatchewan. In addition, Cenovus has certain other non-core assets that are currently being considered for sale. The company intends to apply proceeds from these additional asset sales against its outstanding debt and remains focused on reaching its target of being below two times net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2019.